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The fairest board of all

Suzanne Daniel

LAST year was a high-water mark for the influence of women in Australian politics and public life but a different current in the business world. The tide in fact went out for women with the number of females on the boards of ASX200 companies falling from 8.7 per cent to 8.3 per cent, firming a trend of the past few years.

Much has been written about what this means for the advancement of women and their careers but does it actually matter to business, our communities and Australia at large?

To best understand what is lost with a fall in female directors we should consider what women bring to boards.

Women are no better than men just as men are no better than women: but they do tend to focus on different things and see things differently.

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Rather than creating tensions in a boardroom, different gender perspectives add value. In fact, international studies have consistently shown that the companies with several women at board level are those that perform better financially.

Those that perform best of all have a balance of male and female directors working side by side sharing knowledge, driving innovation and delivering results.

A 2007 report by the US research and advocacy group Catalyst, The Bottom Line: Corporate Performance and Women's Representation on Boards looked at the performance of Fortune 500 companies and ranked them by the number of female board members.

It found that the boards with the most women, compared with those with the least women, had 53 per cent higher return on equity, 42 per cent higher return on sales and 66 per cent higher return on invested capital.

How can this be?

Pondering the traits of highly effective modern-day company directors it's clear that the skills required are found abundantly in women.

Sound judgment, excellent communication, collaborative decision making, understanding and predicting human behaviour, consensus building, trend spotting, wisdom, respect for community expectations, independent thinking, consideration for the impact of decisions on all stakeholders, parking ego outside the boardroom, being ready to challenge assumptions and having the courage to ask the dumb question.

Companies with women on their boards send positive messages to their employees about the opportunities of advancement for their female staff (a good thing with a competitive labour force), gain insights into their own markets (where it's estimated that 80 per cent of household consumer decisions are driven by women) and find favour with their investors (who increasingly include women).

The things female company directors look for and see often vary from the things male directors look for and see.

When boards have the perspective of both genders the view is 360 degrees.

Many companies will only realise maximum value when they utilise women's abilities and insights.

Female directors are likely to fully understand work-life-family integration, a big issue for many employees. What's good for women, is good for men, is good for our children, is good for business, is good for our society.

If the upside of women serving on public company boards is so clear why then is their participation rate falling?

I have a theory. It's not the whole story and I know some women won't like it.

However here goes: When it comes to board appointments women are often coy. Many women of my generation were taught ''you are clever and capable and able to do anything but … don't ever call a boy, let him make the first move, he must court you''.

Women are waiting to be invited on to public boards by men.

How many women are founding and listing their own companies? Appointing their own boards? Calling male company directors, asking to meet with them and making a business case for why they should join the board?

Well, girls, it's no longer the school dance.

Women should be confident first-movers. Don't underrate the relevance of your background to a company board's workings. Your career may not be traditional by male standards but complemented by voluntary work, time on non-profit boards, parents' committees, sporting associations, neighbourhood projects, raising children, consumer advocacy or church work.

It's all invaluable experience and also goes to keeping women in step with community sentiment that increasingly has an impact on the success or failure of businesses and organisations.

Education also plays a vital role in preparing tomorrow's male and female company directors. Business schools and company directors' courses should include the value of gender-based differences in management, thinking styles, problem solving, group dynamics, conflict resolution and modes of communication.

The link between female board members and business success should be embraced, explored and understood.

Let's try first to raise the number of women on boards without mandatory quotas such as they have in Norway and are moving towards in France.

Quotas may achieve a shift in numbers but could cost women respect and create resentment.

The Australian Institute of Company Directors has recommended setting targets and if enough shareholders believe that female directors add value, that our male directors need to seek balance in their boardrooms and look beyond the old-boy network, and women step forward and consider gender diversity a business advantage not just a matter of equality, all Australians will benefit from boards utilising the other half of our intellectual capital.

As a mother of two daughters I have not had the ''don't call boys conversation'' and as the mother of a teenage son I know today's girls do call, or at least text, and I applaud them for it … if it's before 10pm.

Suzanne Daniel is a Vincent Fairfax Fellow, former journalist and now public company director. She serves on the boards of Hunter Hall International Limited and The Young Endeavour Youth Scheme.